Bradford City offer Nahki Wells new contract

Speaking to a room of Bradford City fans prior to Saturday’s game with Leyton Orient, alongside the Supporters Board and Width of a Post, David Baldwin revealed that Nahki Wells has been offered a new contract that would make the Bermudian the highest paid player at the club.

Baldwin also commented that the Bantams have a playing budget deficit of £1 million, and are set to make a £500k loss this season. To keep the wage budget at the same level as next season would result in a similar loss. Therefore, the club is looking at alternative sources of revenue.

David added that the difference between selling Wells in January or during the summer may prove at least £1 million in terms of the transfer fee they could receive, due to the striker’s contract expiring in the summer of 2015. It therefore appears that how Wells responds to the contract offer will dictate the January transfer window.

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I find this latest disclosure on the current state of our club’s finances mind-boggling.

In the recent past, DB has explained clearly that the ‘break even’ playing budget is established as being equal to the amount received in season ticket and flexi ticket sales. And all the other running costs are covered by sponsorship, on the day ticket sales, payments from the FL etc. This seems to be a sensible approach if we are to avoid the same financial problems that we have experienced in the not-too-distant past. Of course, we all understand that promotion into Div 1 will have increased players’ salary expectations and quite rightly so. But the other dimension to this equation is that the club sold more than 40% more ST’s and Flexi’s than the year before and the overall price of an ST went up by around 10% when the closure of the Bradford End to home supporters is factored in. So, despite an increase in pre-season income of around 50%, the club has committed itself to an overspend against the break-even figure of £1million.

I trust that somebody at the meeting asked DB how this was allowed to happen and for it to come into the public domain almost halfway through the season. Or maybe it was just another clumsy attempt to rationalise the need to sell Wells in January which is already fully understood by most thinking supporters!

To be fair to the club and David, I don’t think it has ever been a secret that – for this season and last – the club has spent more money than it has on wages to give the manager a shot of promotion, and then looked at ways of recovering that deficit later in the season. Last season, for example, City had a £600k deficit which David explained to us in a WOAP interview: https://widthofapost.com/2012/11/27/speaking-to-david-baldwin-part-one/

To quote David from this interview:

“It’s no secret that we have overspent the budget this year, based on our break-even point. The break-even point is a tangible item, which basically means if we spent x amount, bring in y income and the operation costs are z, what’s left over is the playing budget. Well what’s leftover this season for the playing budget, taking us to the break-even point, is far less than when what we consider to be a competitive playing budget. So we as a Board, and the owners, discussed what would happen if we were to go over our break-even point and have a higher playing budget, what things do we have left over in our locker this year, where we can claw the budget deficit back?

“We identified four variants for what we could do. We can sell the building (office block building) which we could gain some income from. There is the onward contracts of some of our former youth players who are in the Premier League, where we could perhaps either look at buying out those contracts or whether there will be situations occurring where various triggers occur as part of those contracts, which you evaluate as a moving stick.

“Then there was the situation of a cup run, which isn’t fundamentally factored in as part of our original break-even budget forecasts. The further we get in the cups, the more it will offset our over-spend. And the final one is sale of player. There’s a reason I have put that as the final, because that is the last thing you want to do. But you have to look at all your permutations and say ‘have I covered all eventualities?’”

“Step one was the fact we had set a speculative budget last year to try and get out of the division, so there was already an overspend to make up. Step two was Mark Lawn having a loan in the company to be paid back, and step three was that we wanted to give the manager a decent budget if we got promoted. So the manager already has a budget this year that is greater than the break-even point.

“The position we ideally want to get to is that, come the end of this season, we have a controlled deficit. We don’t want to have massive debts, but we want to have given the manager a budget to have a go. There is quite a sizeable difference between break even point and the budget we have given the manager, but we are now a third into the season and in and around the play offs. That wouldn’t have happened with a lot less budget. The aim was to see if we could compete in this league.”

Hi Jason, I can only say that the message hasn’t reached the vast majority of supporters despite your (and DB’s) good intentions.

On the matter of the deficit in season 2012/13, DB certainly flagged up the issue of the playing deficit (of around £600k if I recall correctly) and that it had crystallised because of the sale of the office block to the new free school had not gone ahead as planned. However, the club has already managed to declare a profit in the 2011/12 season of around £0.5 million but I don’t recall that being broadcast too widely. Furthermore, the sale of the offices has subsequently gone ahead and yet there has been little mention of it despite its importance to the financials of last season. As you say, it was only the profit generated from the cup run which masked the underlying issue. But of course, we’ll have to wait for another 4 months before the results of the 2012/13 season are published and available to the club’s supporters.

For me, it’s all a bit of crying after the event and with a little more openness from the club on these issues when they are happening rather than several months afterwards would create in my opinion more understanding of the club’s financial position whether that’s concerning the sale of Wells or the inevitable increase in ST prices for next season.

In terms of the school sale, what needs to be remembered is that this was essentially a private deal. Back in 2011, Mark Lawn and the Rhodeses bought the office block from owners Prupim out of their own pocket (£1.3 million if I remember rightly). So in terms of the sale of the office block to One in a Million, quite rightly the trio will have received back their outlay. They took a risk buying land that might have been worthless, so I don’t think anyone could begrudge them getting their money back.

I’m not sure what the land was sold to One in a Million for (the figure I have heard, which I’m not sure if is accurate, suggested a small profit). I’m led to believe this profit was pumped into the club, but I doubt it will have made a major difference to the club’s finances.

Jason, I understand how the purchase of the offices was structured and that the three shareholders said that they would inject the profit on the ultimate sale into the club. I understand that this was the basis on how last year’s deficit was originally to be funded and that the profit from the sale would have filled the deficit. Of course that was overtaken by events by the delay in the opening of the school and we had the good fortune of out two trips to Wembley which more than compensated.

For you information, according to the Land Registry, the free school subsequently bought the land for a little over £1.9 million. I have no idea how the purchase price was structured.

Nahki Wells will have to be sold this January no question!. It’s obviously on the card’s due to these financial over spends on wages.
The board will im sure get the best possible price. I’m afraid we the supporters will see an increase in season tkt price’s next year it gives Mr Parkinson more fund’s to bring in quality player’s I personally would not have an issue. £200 per adult season tkt isnt enough to sustain one healthy wage budget

I agree that £200 is not enough to sustain a budget for wages. City have got to monopolise on the obvious advantage i.e. a higher than average attendance as compared to League One rivals. The capping rule creates a premise that can be manipulated in the club’s favour as it counts against the smaller clubs.